Update: After alleged scam, “Ponzicoin” refunds around $7,000 due to error

"As more players make deposits, older ones are [repaid] at 120%."

[UPDATE 12:20pm CT: Ars reader Brendan Long pointed out that the site's creator, Vortuarackne, told users that due to technical difficulties "all deposits have been refunded." Vortuarackne also provided a public link to prove it. He continued: "Needless to say PonziCoin will no longer be taking deposits. Apologies again for the gigantic cock up."]

A website calling itself Ponzicoin appears to have stayed true to its word—taking bitcoins from "players" and running with them. Since Sunday, 37 people have sent a total of just over 10 bitcoins (worth around $7,000 at present exchange rates) to the site and are still waiting to be paid. Previously, the site had paid out to hundreds of people.

The website, whose creator is unknown and who has obscured any details about him or herself, describes the “game” this way: “Players make deposits in line with the minimum and maximum investment limits. As more players make deposits, older ones are repayed [sic] at 120%.”

Some users on reddit and BitcoinTalk.org have gotten upset that the site’s creator has seemingly vanished into thin air, while others have reveled in schadenfreude.

The user, calling him or herself “Vortuarackne,” did not immediately respond to Ars’ request for comment via the BitcoinTalk.org forum. That username turns up little elsewhere in a cursory search online, and that forum account was only registered at the end of February, when the domain Ponzicoin.co was also registered.

The site’s own Frequently Asked Questions certainly made clear that the entire scheme was going to come to an end at some point and that users should judge their own willingness for risk.

What's a ponzi round?
Eventually deposits start to slow down, meaning payouts become slower as well until they stop. If we have been unable to make a payout for 1 hours, the game is reset and we start a new round. All pending deposits are lost.

So, I could lose all my investment?
Yes, that is the gamble you take when playing Ponzi games. For the best chance of making a return on your investment, you should deposit as early as possible in each round.

As always, caveat Bitcoiner.

Promoted Comments

Guys, I'm terribly sorry I noticed the site was compromised last night with users being able to query the DB and what appears to be able to use my PHP RPC library to directly reach my local bitcoin instance. All deposits have been refunded.

e90145d00763825a395139c7b460365045aa579a90b918b1ae87d3069dfce21f

I am trying to nail down exactly what happened and I will post as much here later today. Initially it is looking like some of the code was available externally via HTTP requests. I'm tracking down which were successful and what the consequences of that are.

Guys, I'm terribly sorry I noticed the site was compromised last night with users being able to query the DB and what appears to be able to use my PHP RPC library to directly reach my local bitcoin instance. All deposits have been refunded.

e90145d00763825a395139c7b460365045aa579a90b918b1ae87d3069dfce21f

I am trying to nail down exactly what happened and I will post as much here later today. Initially it is looking like some of the code was available externally via HTTP requests. I'm tracking down which were successful and what the consequences of that are.

It doesn't feel like a Ponzi scheme to me, only because people knew what they were doing. You put your money in with the hopes that some other saps will do so after you, giving you a 20% bump, if no one did you were SOL. It looks like these poor saps were the SOL ones. I would imagine they are going to reset and start again, no?

The depths of human stupidity... what induces people to put money into a scheme that is so clearly labeled as being a scheme! I have to hope that it is just as a joke or for the thrill... the idea that person could invest in this expecting a profit boggles my mind.

I am a hopeful believer in cryptocurrencies, but some people just lack any sense or reason...

The hilarious thing is that you probably couldn't even prosecute the person, even if you caught them. They clearly stated that people would be screwed out of their money.

It reminds me of a story I read once where a guy paid for a meal at a fast food restaurant with fake money that was SO obviously not real, that the Secret Service refused to investigate it, saying that no reasonable person would have accepted it as real money, therefore it wasn't really a counterfeiting case.

There are no words for the extremity of the stupid involved in the decision to send this guy bitcoins and then wonder where your bitcoins went. The English language just doesn't contain vocabulary for the scale of it.

The hilarious thing is that you probably couldn't even prosecute the person, even if you caught them. They clearly stated that people would be screwed out of their money.

It reminds me of a story I read once where a guy paid for a meal at a fast food restaurant with fake money that was SO obviously not real, that the Secret Service refused to investigate it, saying that no reasonable person would have accepted it as real money, therefore it wasn't really a counterfeiting case.

It wouldn't entirely surprise me if a variety of humorless state regulators would view this as one of those wicked, youth-destroying games of chance not played in a casino giving them a cut of the take...

Advancing a fraud case would be difficult; but arguing that a 'transparent ponzi scheme' is a game of skill rather than chance could also be difficult.

Guys, I'm terribly sorry I noticed the site was compromised last night with users being able to query the DB and what appears to be able to use my PHP RPC library to directly reach my local bitcoin instance. All deposits have been refunded.

e90145d00763825a395139c7b460365045aa579a90b918b1ae87d3069dfce21f

I am trying to nail down exactly what happened and I will post as much here later today. Initially it is looking like some of the code was available externally via HTTP requests. I'm tracking down which were successful and what the consequences of that are.

It seems the real value of this website was to just sit back and wait for the losers (figurative and literal) to start complaining on the internet that they got scammed by a website that told you in big large letters that it is a scam.

Because clearly the giant flashing neon scam sign was nowhere near big enough for them.

The hilarious thing is that you probably couldn't even prosecute the person, even if you caught them. They clearly stated that people would be screwed out of their money.

It reminds me of a story I read once where a guy paid for a meal at a fast food restaurant with fake money that was SO obviously not real, that the Secret Service refused to investigate it, saying that no reasonable person would have accepted it as real money, therefore it wasn't really a counterfeiting case.

It wouldn't entirely surprise me if a variety of humorless state regulators would view this as one of those wicked, youth-destroying games of chance not played in a casino giving them a cut of the take...

Advancing a fraud case would be difficult; but arguing that a 'transparent ponzi scheme' is a game of skill rather than chance could also be difficult.

Where are these people getting the idea that fine print overrides the law? Ponzi schemes themselves are explicitly illegal. Whether the victims knew it was a Ponzi scheme has nothing to do with it.

The hilarious thing is that you probably couldn't even prosecute the person, even if you caught them. They clearly stated that people would be screwed out of their money.

It reminds me of a story I read once where a guy paid for a meal at a fast food restaurant with fake money that was SO obviously not real, that the Secret Service refused to investigate it, saying that no reasonable person would have accepted it as real money, therefore it wasn't really a counterfeiting case.

It wouldn't entirely surprise me if a variety of humorless state regulators would view this as one of those wicked, youth-destroying games of chance not played in a casino giving them a cut of the take...

Advancing a fraud case would be difficult; but arguing that a 'transparent ponzi scheme' is a game of skill rather than chance could also be difficult.

Where are these people getting the idea that fine print overrides the law? Ponzi schemes themselves are explicitly illegal. Whether the victims knew it was a Ponzi scheme has nothing to do with it.

"Hey, I'm robbing you! Because this dark alley is called Robber's Alley!" *yoinks wallet and runs*

The hilarious thing is that you probably couldn't even prosecute the person, even if you caught them. They clearly stated that people would be screwed out of their money.

It reminds me of a story I read once where a guy paid for a meal at a fast food restaurant with fake money that was SO obviously not real, that the Secret Service refused to investigate it, saying that no reasonable person would have accepted it as real money, therefore it wasn't really a counterfeiting case.

It wouldn't entirely surprise me if a variety of humorless state regulators would view this as one of those wicked, youth-destroying games of chance not played in a casino giving them a cut of the take...

Advancing a fraud case would be difficult; but arguing that a 'transparent ponzi scheme' is a game of skill rather than chance could also be difficult.

Where are these people getting the idea that fine print overrides the law? Ponzi schemes themselves are explicitly illegal. Whether the victims knew it was a Ponzi scheme has nothing to do with it.

"Hey, I'm robbing you! Because this dark alley is called Robber's Alley!" *yoinks wallet and runs*

The depths of human stupidity... what induces people to put money into a scheme that is so clearly labeled as being a scheme! I have to hope that it is just as a joke or for the thrill... the idea that person could invest in this expecting a profit boggles my mind.

I am a hopeful believer in cryptocurrencies, but some people just lack any sense or reason...

Reminds me of this article from a few years back when they asked one of the people that do the Nigerian Prince Scam why they still use that when everyone knows its a scam. They replied because that knowledge basically does the screening for them. It basically eliminates anyone smart enough to know its a scam or would do the tiniest bit of research. The ones that still click on the link and send a check are the ones they are looking for and it helps lower the cost of the scam.

Guys, I'm terribly sorry I noticed the site was compromised last night with users being able to query the DB and what appears to be able to use my PHP RPC library to directly reach my local bitcoin instance. All deposits have been refunded.

e90145d00763825a395139c7b460365045aa579a90b918b1ae87d3069dfce21f

I am trying to nail down exactly what happened and I will post as much here later today. Initially it is looking like some of the code was available externally via HTTP requests. I'm tracking down which were successful and what the consequences of that are.

It doesn't feel like a Ponzi scheme to me, only because people knew what they were doing. You put your money in with the hopes that some other saps will do so after you, giving you a 20% bump, if no one did you were SOL. It looks like these poor saps were the SOL ones. I would imagine they are going to reset and start again, no?

It doesn't feel like a Ponzi scheme to me, only because people knew what they were doing. You put your money in with the hopes that some other saps will do so after you, giving you a 20% bump, if no one did you were SOL. It looks like these poor saps were the SOL ones. I would imagine they are going to reset and start again, no?

That's exactly what a Ponzi scheme is though.

I have never in my life heard of a Ponzi scheme where people are told, "Hey, if you are the last people in you don't get any money."That is the key, they knew the score going in. It wasn't, "Oh I met a great investment guy" then 3 years later all your money is gone because he used it funding other people.

It doesn't feel like a Ponzi scheme to me, only because people knew what they were doing. You put your money in with the hopes that some other saps will do so after you, giving you a 20% bump, if no one did you were SOL. It looks like these poor saps were the SOL ones. I would imagine they are going to reset and start again, no?

That's exactly what a Ponzi scheme is though.

Generally Ponzi schemes are falsifying they are a some form of investing instead of gambling, in fact the odds of 'winning' are probably better here than most games in Vegas.

It might be better to ask what kind of smart people would not invest in something called "Ponzicoins" because the numbers will be a lot more manageable.

50% of the populace is below average intelligence.

I think you will find it's less than 50% - think hard before being a downvote fool who is technically incorrect!

I really don't know what to say. I can only assume the people had never heard of the word Ponzi and dont bother to read anything.... Anyway have any of the usual suspects blamed this on the Bitcoin protocol being broken yet?